When it comes to finding undervalued opportunities in today’s market, AT&T (T) stands out. With a current price between $22-$23 and a fair value estimated at $60, the stock is hard to ignore.
While it’s not the flashiest play in the Communications sector, AT&T offers a combination of value, income and stability that few others can match.
Here’s how I’m playing it over the long term.
I’ve structured a trade using options to create a low-risk, high-reward setup. The idea is to capitalize on AT&T’s strong fundamentals and potential for upside while maintaining a healthy income stream.
The trade involves a January 2026 expiration, $22 strike call, which I purchased for $2.37. At the same time, I sold a $25 put, a $22 put, and a $20 put — netting $3.65 in credit. This setup offers multiple layers of profitability and flexibility.
If AT&T’s price climbs above $25, I’ll retain the full $365 credit from the sold puts while benefiting from the appreciation of the long call.
At $28, for example, the call alone could deliver a 153% return on risk. Add in the credit from the puts, and this trade could yield over $700 in profit. Not too shabby for what’s essentially an income play.
Now, let’s talk about downside protection.
If I get assigned shares, my break-even price drops significantly — down to $21.11. This gives me confidence in holding the stock, knowing it would be well below the current price and supported by a healthy dividend.
When evaluating AT&T against its peers, the value is clear. Its price-to-earnings ratio sits at 18.1 — below the peer average of 20.5. Compare that to T-Mobile (TMUS) at 24.4 and Verizon (VZ) at 16.7, and you can see why AT&T looks like a strong contender for value-focused investors.
This isn’t a “get-rich-quick” trade, but it’s one that makes sense for a conservative, income-oriented portfolio. Whether AT&T moves higher or pulls back slightly, I’m positioned to profit — and that’s the kind of setup I like.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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